It’s one of the biggest debates in the Australia property market 2026: Are houses still outperforming units, or has the market completely shifted?
With affordability tightening, inflation rising, and lifestyle preferences changing across Sydney, Melbourne, Brisbane and regional areas, many buyers and investors are rethinking where real long-term value actually is.
We analyse why units and townhouses are now outperforming houses in multiple LGAs, what’s driving this shift, and how buyers can protect themselves from bad assets and identify high-performing opportunities.
The old rule of property that you should buy land because it always appreciates is losing relevance. In 2026, affordability pressures and lifestyle shifts are pushing many buyers towards units close to city centres and beaches over houses in faraway suburbs.
Units are cheaper than houses
With property prices rising, many houses are simply out of reach. Most people can’t stretch to a $1.5million house in a premium suburb, but they can buy a $800,000 unit on the same street.
Given the cafes, the public transport and the nearby beaches, that unit is much more enticing than a home out in the sticks.
Houses don’t always outperform units
Data from the last ten years shows multiple LGAs where units have done better than houses. For many people, it isn’t the building that’s important but the location. First time buyers, single people and downsizers often prefer a unit to a house, anyway.
With this demand, a unit in a good spot can easily outperform a house with fewer interested buyers.
How to spot a good unit
If you’re going to live in a unit, you should have your own checklist for what you want. Even though, it’s worth thinking about resale value if you might move on later in life.
Typically, a strong-performing unit has:
- Strong rental demand (normally because of its location)
- Something that makes it unique (a nice courtyard, ocean views, natural light, few common walls)
- Lifestyle amenities close by (cafes, beaches, shops etc)
- Either low strata fees or facilities like pools and gyms that merit a high price
And remember, avoid poor-quality high-rise stock where there’s plenty of the same available nearby.
Do your due diligence
Always review strata reports carefully. Issues like upcoming major works or concrete cancer can turn a good buy into an expensive mistake. These mistakes can cost tens of thousands of dollars if you don’t spot them in time.
Likewise, check to see how much the strata has to spend on repairs and if anything major like a new lift is expected soon. Many strata companies try to slowly increase rates to cover expected payments, but investors often vote against this, hoping they can sell before they have to pay anything and then the new owners will be lumped with a special levy.
And unless you’re highly experienced, avoid buying off the plan.
Houses vs units: which is better?
Neither houses nor units “win” outright — the winner is the right asset in the right area. But in 2026, units are no longer the compromise they once were. For many people, they offer the perfect mix of growth, affordability and lifestyle.
Personally? I’d take a well-located unit near the beach over a house 40 minutes inland every single time.